Correlation Between L Catterton and Learn CW

Can any of the company-specific risk be diversified away by investing in both L Catterton and Learn CW at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining L Catterton and Learn CW into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between L Catterton Asia and Learn CW Investment, you can compare the effects of market volatilities on L Catterton and Learn CW and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in L Catterton with a short position of Learn CW. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Catterton and Learn CW.

Diversification Opportunities for L Catterton and Learn CW

-0.05

Correlation Coefficient

L Catterton  Learn CW

Good diversification

The 3 months correlation between LCAA and Learn is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding L Catterton Asia and Learn CW Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Learn CW Investment and L Catterton is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on L Catterton Asia are associated (or correlated) with Learn CW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Learn CW Investment has no effect on the direction of L Catterton i.e., L Catterton and Learn CW go up and down completely randomly.

Pair Corralation between L Catterton and Learn CW

If you would invest  1,087  in Learn CW Investment on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Learn CW Investment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

L Catterton Asia  vs.  Learn CW Investment

L Catterton Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days L Catterton Asia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, L Catterton is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Learn CW Investment

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Learn CW Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Learn CW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with L Catterton and Learn CW

The main advantage of trading using opposite L Catterton and Learn CW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Catterton position performs unexpectedly, Learn CW can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Learn CW will offset losses from the drop in Learn CW's long position.

The idea behind L Catterton Asia and Learn CW Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.